Biosimilar path to take form by patent cliff

It’s hard to disagree that generic drug companies have had a good run for the last several years. Branded drug companies developed a large number of drugs that proved highly effective at treating widespread medical conditions and became blockbusters, garnering billions of dollars in sales in the United States alone. As patents on these blockbuster drugs have expired, they’ve provided generic manufacturers with enormous revenues, helping some to join the ranks of the world’s biggest drug companies.

Over the next few years, however, the party will come to an end as the number of blockbusters losing patent protection dwindles, part of what experts have come to call the “patent cliff.” While this will force many generic drug companies to merge, larger companies are looking to biosimilars.

The Affordable Care Act included a provision to create a regulatory approval pathway for biosimilars, though it turned out to be something of a pyrrhic victory for generics manufacturers because it would grant 12 years of market exclusivity to biotech drugs instead of the five years given to pharmaceuticals. Nevertheless, it brings biosimilars one step closer to the market.

“In terms of biosimilar drug manufacturers, there are huge opportunities because their biosimilar products have the potential to erode significant sales away from the branded agent,” Decision Resources analyst Andrew Merron told Drug Store News. “Biosimilars will target the most commercially successful branded biologics, and even if the biosimilar only manages to capture a small percentage of erosion from the major biologic blockbusters, sales could still be significant.”

IMS Health expected the global market for biosimilars to be between $1.9 billion and $2.6 billion by 2015, but its actual value — let alone the U.S. market’s value — remains uncertain. “That is a question that we are debating quite vigorously right now,” IMS Health VP industry relations Doug Long told DSN.

One major issue that remains is the form the regulations will take. The trouble with biosimilars, compared with generic pharmaceuticals, is that differences in the cells used to produce a reference product and those used to produce a biosimilar make it difficult to produce an exact copy, meaning that clinical trials will be necessary to determine that the latter is as safe and effective as the former. “The law has been passed; everybody’s waiting for the guidelines,” Long said. “When they will come out is anybody’s guess.” Still, Long said IMS expected them to hit the market in late 2013 or 2014.

Companies that already make biosimilars for the European market — Teva Pharmaceutical Industries, Sandoz and Hospira — are likely to be the first to market in the United States as well, Long said. In addition, Mylan and Watson have expressed an interest, but whether or not talk about making biosimilars will translate into action is unclear. With the costs of developing biosimilars estimated in the hundreds of millions of dollars, according to most analyses, the number of companies making them will probably remain small.

In terms of the first products, Long and Merron both said biosimilar versions of such drugs as Amgen’s Neupogen (filgrastim) and Neulasta (pegfilgrastim) — used to prevent infections in patients on chemotherapy — as well as epoetins would come before more complex treatments for cancers and autoimmune disorders, such as monoclonal antibodies. Teva applied last January for FDA approval of its versions of Neupogen and Neulasta, which it already markets in Europe. In the absence of an abbreviated approval pathway, it had to apply using a biologics license application — the same process used by branded biologics manufacturers — and Amgen has sought to block it. In July, Teva and Amgen reached a settlement that would allow Teva to launch its versions by November 2013.

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